Invincible Investment : Notice concerning Revision of Forecast of Financial Results and Distribution for the 37th Fiscal Period Ending December 2021

[For Information Purpose Only.

The Japanese language press release should be referred to as the original.]

December 8, 2021

To All Concerned Parties

Name of REIT Issuer:

Invincible Investment Corporation

Naoki Fukuda, Executive Director (Securities code: 8963)

Asset manager:

Consonant Investment Management Co., Ltd. Naoki Fukuda, President & CEO

Contact: Jun Komo

General Manager of Planning Department (Tel. [phone])

Notice concerning Revision of Forecast of Financial Results and Distribution for

the 37th Fiscal Period Ending December 2021

Invincible Investment Corporation ("INV") today announced the revision of its forecast of financial results and Distribution per Unit ("DPU") for the fiscal period ending December 2021 (37th Fiscal Period), stated as TBD in "Financial Summary for the December 2021 Fiscal Period (from July 1, 2021 to December 31, 2021)" dated August 25, 2021.

1. Revision of the forecast of financial results and distribution for the fiscal period ending December 2021 (from July 1, 2021 to December 31, 2021)

Operating

Operating

Ordinary

Total

Net Income

Distribution

Revenues

Income

Income

Amount

Previous forecast (A)

JPY million

JPY million

JPY million

JPY million

JPY million

(announced on

TBD

TBD

TBD

TBD

TBD

August 25, 2021)

Revised forecast (B)

JPY million

JPY million

JPY million

JPY million

JPY million

7,957

1,804

516

515

512

Amount of variance

JPY million

JPY million

JPY million

JPY million

JPY million

(B) - (A)

-

-

-

-

-

Rate of variance

%

%

%

%

%

((B) - (A)) / (A)

-

-

-

-

-

(Reference)

JPY million

JPY million

JPY million

JPY million

JPY million

Fiscal Period Ended

8,340

1,690

624

623

1,018

December 2020

This English language notice is a translation of the Japanese-language notice released on December 8, 2021 and was prepared solely for the convenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

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Distribution

Distribution

per Unit

Excess Profit

per Unit

Earnings per

(Excluding

Distribution

(Including Excess

Unit (Note 1)

Excess Profit

per Unit

Profit Distribution

Distribution per

(Note 1)

per Unit) (Note 1)

Unit) (Note 1)

Previous forecast (A)

JPY

JPY

JPY

JPY

(announced on

TBD

TBD

TBD

TBD

August 25, 2021)

Revised forecast (B)

JPY

JPY

JPY

JPY

84

84

-

84

Amount of variance

JPY

JPY

JPY

JPY

(B) - (A)

-

-

-

-

Rate of variance

%

%

%

%

((B) - (A)) / (A)

-

-

-

-

(Reference)

JPY

JPY

JPY

JPY

Fiscal Period Ended

102

167

-

167

December 2020

(Note 1) The total number of investment units issued and outstanding at the end of the fiscal period: 6,096,840 units

(Reference)

Assumptions underlying the forecast of financial results and DPU for the fiscal period ending December 2021 are provided in Appendix 1.

2. Reasons for the revision of forecast of financial results and distribution

The forecast of financial results and DPU for the fiscal period ending December 2021 (from July 1, 2021 to December 31, 2021) remained undetermined at the time of the announcement of "Financial Summary for the June 2021 Fiscal Period" on August 25, 2021, as it was difficult to create the forecast due to the effects from the spread of COVID-19. As announced in "Notice concerning Conclusion of Memorandum of Understanding to Amend the Fixed-term Building Lease and Property Management Agreement pertaining to the rent conditions for the period from October to December, 2021 with Major Tenant" dated today ("MLPM Amended Agreements Press Release"), INV entered into a Memorandum of Understanding to amend each fixed-term building lease and property management agreement ("MLPM Agreements") pertaining to the rent conditions for domestic hotels owned by INV with INV's main tenant, MyStays Hotel Management Co., Ltd. ("MHM") and its affiliates (the "MHM Group"), who operate the hotels as of today. Furthermore, as announced in "Notice concerning Sale of Domestic Trust Beneficiary Interests" dated today, INV has decided to sell seven residential properties on December 22, 2021 and six residential properties on January 12, 2022. Taking these effects into account we have decided to announce the revision of the forecast of financial results and DPU for the fiscal period ending December 2021, based on the information currently available to INV and certain assumptions that are deemed reasonable by INV.

The forecast of financial results and DPU for the fiscal period ending June 2022 and onwards will be announced at a later date, once we have a clearer outlook.

This English language notice is a translation of the Japanese-language notice released on December 8, 2021 and was prepared solely for the convenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

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In the fiscal year ending December 2021 ("Current Period"), the occupancy rate of domestic hotels in July exceeded the previous year's results, but due to the influence of the spread of COVID-19, so- called 5th wave, priority measures such as State of Emergency and quasi-State of Emergency declarations were applied over a wide area nationwide from July to September, and hotel demand fell again. In addition, since most of the Tokyo Olympics and Paralympics were held without spectators, the previously assumed positive ripple effect on the accommodation demand of many hotels owned by INV in the Tokyo metropolitan area and Hokkaido was limited. However, after the cancellation of the state of emergency at the end of September, behavioral restrictions such as movement across prefectures were gradually relaxed, and both business demand and leisure demand started to show sign of recovery. The occupancy rate of domestic hotels at the moment is outperforming the previous year when the Go To Travel campaign was implemented. On the other hand, demand from inbound tourists cannot be expected for the time being, as the Japanese government has effectively halted non-resident foreigners from entering Japan, following the recent reports of infections from a new COVID-19 variant (Omicron variant) around the world.

Change in Occupancy Rate (Note 1) of 75 Domestic Hotels (Note 2)

(Note 1) "Occupancy Rate" for hotel portfolio is calculated using the following formula:

room occupancy rate = total number of rooms occupied during the relevant month ÷ (aggregate number of rooms during the relevant month x number of business days during the relevant months). Hereinafter the same.

(Note 2) Based on 75 hotel properties; of the 84 domestic hotel properties (including Sheraton Grande Tokyo Bay Hotel, the underlying asset of preferred equity interest held by INV) held as of the end of November 2021, nine hotels with fixed-rent lease agreements are excluded. Hereinafter the same.

(Note 3) The figures for November 2021 and onwards show estimated figures as of today and are subject to change.

Regarding the two overseas hotels in the Current Period, the Cayman Islands government continued its cautious stance on when to resume accepting overseas tourists while paying close attention to the progress of vaccination on the island. Therefore, accommodation demand for the two Cayman hotels was limited to temporary isolation by arrivals and staycation by residents, continuing the

This English language notice is a translation of the Japanese-language notice released on December 8, 2021 and was prepared solely for the convenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

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severe business conditions on the island. On November 20, the Cayman Islands government lifted the self-quarantine measures required for vaccinated tourists after arrival, but unvaccinated children continue to require self-isolation for 14 days. Due to the need for isolation, it may be difficult to anticipate demand from families, and it will take some time for the occupancy rate of the two Cayman properties to recover.

Change in Occupancy Rate of the Cayman Hotels

(Note 4) The figures for November 2021 and onwards show estimated figures as of today and are subject to change.

In response to the above situation, as announced in "Notice concerning Conclusion of Memorandum of Understanding to Amend the Fixed-term Building Lease and Property Management Agreement pertaining to the rent conditions for the period from July to September, 2021 with Major Tenant" dated September 10, 2021 and MLPM Amended Agreements Press Release dated today, INV concluded a Memorandum of Understanding for MLPM Agreements with the MHM Group for domestic hotels operated by the MHM Group dated September 10, 2021 and December 8, 2021 (referred to as the "September 2021 MOU" and the "December 2021 MOU" respectively). As a result, the expected rent from the MHM Group for the fiscal period ending December 2021 will be a fixed rent of JPY 1.95 billion and a variable rent of JPY 0.62 billion, totaling JPY 2.57 billion.

Regarding dividend income for the fiscal period ending December 2021 related to preferred equity interest in the Kingdom TMK which holds the Sheraton Grande Tokyo Bay Hotel as an underlying asset, the dividend income is expected to be zero since it is based on the hotel's performance from April 1, 2021 to September 30, 2021, or the calculation period of the TMK issuing preferred equity interest, in which the hotel has seen a significant decline in room occupancy rates.(Note 5)

(Note 5) Kingdom Special Purpose Company (the "TMK"), which is the issuer of preferred equity interest and the owner of Sheraton Grande Tokyo Bay Hotel, or the underlying asset, has a cumulative loss due to the decline in profits of the underlying asset caused by the spread of COVID-19. Therefore, the TMK has been in a situation where it cannot pay dividends even if it settles the accounts. Under such circumstances, the TMK has amended its Articles of Incorporation to temporarily extend its six-month

This English language notice is a translation of the Japanese-language notice released on December 8, 2021 and was prepared solely for the convenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

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accounting period to a 12-months accounting period in order to curb the costs of settlement of accounts. Therefore, in INV's fiscal period ending December 2021, the settlement of accounts of the TMK will not be carried out. This measure is temporary, and TMK plans to restore to the original 6-month settlement once the cumulative loss is resolved and TMK is expected to be able to resume payment of dividends.

As a result, the NOI of domestic hotels for the fiscal period ending December 2021 is expected to be JPY 2,636 million, an increase of 6.8% compared to the December 2020 fiscal period, but a decrease of 76.5% compared to the December 2019 fiscal period prior to the pandemic.

For the two overseas hotels, expenses at the hotels are estimated to exceed its sales, so the excess amount of hotel expenses (JPY 164 million) will be recorded as management contract expense, while management contract revenue will not be recorded. NOI is expected to be JPY (320) million.

With regard to the residential portfolio, while the occupancy rate was sluggish in the fiscal period ending December 2021 due to the spread of COVID-19 infections, it recovered from the beginning of 2021, and at the end of November 2021 it is almost the same level as the end of November 2020. Due to the impact of the disposition of the six properties on December 28, 2020 and disposition of seven properties scheduled for December 22, 2021, NOI for the residential portfolio is expected to be JPY 1,373 million, a decline compared to the same period in the previous year. In addition to these, INV plans to record a gain on sale of JPY 2,539 million in the Current Period due to the disposition of Lexington Plaza Hachiman (a retail property) completed on July 2, 2021 and disposition of abovementioned seven residential properties to be completed on December 22, 2021.

As a result, net income for the fiscal period ending December 2021 is expected to be JPY 515 million. INV intends to distribute a total of JPY 512 million (JPY 84 per unit), or almost the entire amount of the abovementioned net income.

Nearly two years have passed since the outbreak of the pandemic. The outlook for the hotel sector remains uncertain, but INV and its asset management company will continue to make every effort to recover.

Website of INV:https://www.invincible-inv.co.jp/en/

This English language notice is a translation of the Japanese-language notice released on December 8, 2021 and was prepared solely for the convenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

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